Thursday, June 25, 2009

Corus to cut 2,045 more jobs in Europe

S Kalyana Ramanathan / London June 26, 2009

Corus Group, Europe’s second-largest steel maker and a subsidiary of Tata Steel, today announced 2,045 fresh job cuts, mostly in three of its plants in the United Kingdom. These will be over and above the 2,500 job cuts it had announced at the beginning of 2009.

A statement issued today by Corus said the consultation process within the company identifies 2,045 jobs as being at risk. Some 1,500 of these are in the company’s production facilities — around 800 at the engineering steels sites, mainly Rotherham and Stocksbridge; about 370 in Corus Tubes in the UK and the Netherlands; and about 375 at downstream rolling and finishing plants in Teesside and Scotland. The company is also opening consultations on 500 white-collar jobs throughout the Corus Long Products division, the majority at Scunthorpe.

The steel maker’s parent company Tata Steel, in its statement announcing its financial results for 2008-09, further said the potential for compulsory redundancies cannot be ruled out, though efforts will be taken to make many of these job losses as voluntary as possible.

“Redundancy packages and outplacement support services will be available to those leaving the company. There will be full consultations with employees and their representatives throughout the process,” Tata Steel said.

Corus CEO Kirby Adams said: “We understand the difficulties these job losses are likely to cause our employees and their families. Any recovery in Europe appears to be some time off, so it is vital that we take this proportionate and responsible action now. We have to achieve long-term, sustainable competitiveness in a global and over-supplied steel market.”

During 2008-09, steel deliveries and liquid steel production for Corus fell by 14 per cent and 20 per cent to 19.69 million tonnes and 16.21 million tonnes respectively, reflecting a weak second half of the year. Turnover at Corus during the year, however, increased by 9 per cent to Rs 109,570 crore ($21,439 million) and, while EBITDA decreased by 2 per cent to Rs 8,906 crore ($1,751 million) in the financial year 2008-09 compared with the financial year 2007-08.

GMB, Corus Group’s primary labour union in the UK, in a statement issued in reaction to the fresh job losses, said that this was a devastating news and the union will need to talk to Corus as soon as possible.

The fresh job cuts, despite these initiatives were, as a result of the “continued to experience deteriorating market conditions” in some of the group’s European operations. including decline in demand in Europe and America.

These fresh job cuts also comes at a time when the company’s Teesside plant is the verge of being mothballed due to the loss of a major long term contract involving a consortium of buyers from Europe and Asia. The closure or even temporary shut down of this plant would result in nearly 2000 people losing their jobs.